ASSESSMENT ON VIETNAM INDUSTRIAL REAL ESTATE

The Covid 19 epidemic in Vietnam was basically under control , this is the basis for preparing production and attracting investors. in industrial field.

1. The situation of Q1 FDI in Vietnam

According to data from the Foreign Investment Agency (Ministry of Planning and Investment), as of March 20, 2020, the total newly registered capital, adjusted and contributed capital to purchase shares of foreign investors reached 8. , $ 55 billion, by 79.1% over the same period in 2019.

In the first quarter of 2020, the whole country had 758 new projects granted investment registration certificates with a total newly registered capital of US $ 5.5 billion, up 45% over the same period in 2019. However, the capital disbursed investment was still at a good level, reaching 3.85 billion USD, equaling 93.4% over the same period in 2019. Although still decreasing compared to the same period, this is a remarkable figure in the context of the COVID epidemic. -19 complicated movements greatly affect the implementation progress of projects.

In the first quarter of 2020, foreign investors invested in 18 fields, of which electricity production and distribution led with a total capital of over US $ 4 billion, accounting for 47.5% of total investment capital. from registration.

Next is the manufacturing and processing industry, with total investment capital of 2.72 billion USD, accounting for 31.9% of total registered investment capital. Then came the wholesale and retail business, real estate business with total registered capital of 682 million USD and 264 million USD.

Regarding investment partners, in the first quarter of 2020, there were 87 countries and territories having foreign direct investment (FDI) projects in Vietnam, of which, Singapore led. Next are Japan, China and South Korea.

Regarding investment areas, foreign investors have invested in 55 provinces and cities in Vietnam, of which, Bac Lieu is the province attracting the most FDI. Next is Ho Chi Minh City, Tay Ninh./.

The increasingly complicated outbreak of Covid-19 respiratory tract disease has greatly affected the travel of investors as well as new investment decisions and the expansion of the existing foreign investment project. making FDI attraction in the first 3 months of 2020 decrease in both quantity and total registered investment capital.

2. Real estate investment comments of foreign investors in quarter 2/2020 in Vietnam

Expected foreign investment situation will also affect in the second quarter. However, some optimistic signals in the field of real estate in Vietnam market:

firstly, the Covid epidemic in Vietnam was basically under control (as of April 19, 2020, 72 hours in a row, Vietnam did not register new cases), this is the basis for preparing production and attracting investors. in industrial field.

Second: In the middle of the corona virus pandemic, Japanese Prime Minister Shinzo Abe proposed measures to build an economy less dependent on China so that the "Rising Sun" country could avoid interruptions in the chain. supply. In an emergency stimulus package approved on April 7, the Japanese government called for the re-establishment of the supply chain that was attacked by the disease.

The Japanese government spends more than 240 billion yen (about US $ 2.2 billion) in the additional budget plan for fiscal year 2020 to support Japanese companies to relocate their factories to the country or to diversify production facilities. by moving to Southeast Asia. This is an optimistic signal for Vietnam's industrial real estate because Vietnam is one of the favorite places for Japanese industrial investors.

For Korean investors: Korea still considers Vietnam as a traditional market, giving priority to manufacturing investment. Specifically, at the end of February 2020, Samsung planned to start construction of a R&D center with a working space for 3,000 people in Tay Ho Tay (Hanoi) and Southeast Asia's largest R&D facility. yourself.

Similarly, if you look at the large-scale projects that Posco, Hyundai, Lotte ... have invested in Vietnam. These projects have had a great impact on the economy and society, making an important contribution to promoting the development of Vietnam's electronics industry. Dozens of satellite investors, with billions of dollars in investment, have followed Samsung and LG to set up their headquarters in Vietnam.

South Korea has and will continue to become an important investment partner of Vietnam, with the reason not only because of the large amount of capital, but also because the investment capital from this country is aiming at the strategic goal. FDI attraction of Vietnam.

Hong Kong: In the top 5 biggest investors of Ho Chi Minh City in quarter 1/2020, Hong Kong leads with nearly 40% of total capital. It is followed by Singapore (18.21%), South Korea (10%), British Virgin Islands (9.74%), Japan (9.26%). FDI inflows to Ho Chi Minh City reached 8.3 billion USD, up 39.4% compared to 2018, with Top 5 largest investors from Hong Kong (39.14%), Singapore (18.21%) , South Korea (10%), British Virgin Islands (9.74%), Japan (9.26%). Real estate ranked second in attracting FDI with a value of about US $ 2.06 billion, accounting for 24.9% of the city's total FDI. In 2019, foreign investors tend to choose cooperation methods with local real estate businesses to develop projects. Because Vietnam Real Estate market is much cheaper than in Hong Kong while the profitability is higher. As of 2019, housing prices in Hong Kong have for nine consecutive years ranked No. 1 on the list of the world's most expensive housing markets compared to income, reports from urban planning consultancy firm. Demographia said. According to data from the Savills World City Prime Index, released in August 2014, the price per square meter of housing in Hong Kong falls to about $ 50,700, or about 1.2. billion. By the end of the year, housing prices in Hong Kong have decreased slightly, but remain the champion. Specifically, Hong Kong has the most expensive apartment price with 45,500 USD / m2, followed by Singapore with 25,600 USD / m2, Tokyo (Japan) is 15,800 USD / m2 and Bangkok (Thailand) is 4,500 USD. Meanwhile, in Ho Chi Minh City and Hanoi, the prices are US $ 3,800 / m2 and US $ 3,200 / m2, respectively, lower than the US $ 4,500 / m2 price in the Bangkok market. Just looking at this price will see the attractiveness of Vietnam's real estate market compared to the region in general and Hong Kong investors in particular. It also explains why Hong Kong investors lead in the top 5 biggest investors in Ho Chi Minh City in the real estate market.

In 2020, Vietnam and the European Union (EU) will celebrate 30 years of cooperation. The event of the official European Parliament's approval of two important economic agreements with Vietnam, including the Vietnam-EU Investment Protection Agreement (EVIPA), is expected to abolish investors' hesitation. EU investment, creating a new wave of investment from the EU market into Vietnam.

That is the reason to believe in a new wave of industrial real estate in the second quarter after the Covid epidemic in Vietnam.